WEEKLY UPDATE: 04/02/26
A new study analyzing the potential impact of a “Connecticut Option” found that creating a new government-controlled health insurance plan could exacerbate the healthcare affordability crisis by increasing costs for working families and employers and slashing payments to doctors, hospitals, and other providers.
The 20-page report was prepared by KNG Health Consulting, a Maryland-based health economics and policy firm, on behalf of the Partnership for America’s Health Care Future Action. Researchers modeled the effects of allowing small businesses, nonprofits, and unions to buy into the state’s Partnership Plan — effectively turning it into a public option for the small-group and not-for-profit markets — over 10 years (2026–2035). They concluded the policy could significantly reshape the state’s insurance market, cascading into a series of unintended, negative consequences.
Key findings of KNG Health’s study include:
- State revenue from premium taxes and health insurance assessments would fall between $44.5 million and $1.1 billion from 2026 to 2035, with the larger losses occurring if eligibility for the public option is broad and employer take-up is high (75%)
- To keep the plan financially stable, the state would either need to cut provider reimbursement rates by 19% or raise between $134.5 million and $17.3 billion in new revenue from 2026 to 2035, likely through new or increased taxes, premiums, or fees
Connecticut hospitals have been sounding the alarm on the dangers of introducing a state-run public option, warning the plan would strip patients of choice, reduce access to care close to home, lead to longer wait times, and raise taxes. A government-controlled health plan relies on restricting where patients can go for care and setting limits on what caregivers are paid. Narrower provider networks mean patients may lose access to their trusted doctors and face higher premiums; cutting provider payments could push skilled healthcare professionals out of state and force hospitals to scale back services.
The Connecticut Hospital Association (CHA) continues to advocate for solutions that strengthen what works in the state’s nationally recognized healthcare delivery system and address systemic issues such as Medicaid and Medicare underpayment, rather than build unstable structures that risk repeating known challenges.
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Related News:
Concerns Raised Over Proposed Connecticut Public Option
Hospitals, Employers, and Advocates Raise Concerns Over “Connecticut Option” Study
